If a property was worth $233,087 two years ago and appreciated at a rate of 6% each year, what is its current value?

To determine the current value of a property that appreciates at a rate of 6% annually, you can use the formula for compound interest, which can also be applied to investment appreciation. The formula is:

[ \text{Future Value} = \text{Present Value} \times (1 + r)^n ]

where:

• Present Value is the initial value of the property ($233,087)
• ( r ) is the annual appreciation rate (6% or 0.06)
• ( n ) is the number of years (2 years)

Applying the formula:

1. Calculate ( (1 + r)^n ): [ (1 + 0.06)^2 = 1.06^2 = 1.1236 ]

2. Multiply this result by the initial property value: [ \text{Future Value} = 233,087 \times 1.1236 ] [ \text{Future Value} = 261,896.1572 ]

Rounding this to the nearest dollar gives us $261,896, which aligns with the choice of $261,897. This is the correct value that reflects the compounded appreciation of the property over